Skip to main content

Deconstructing Solar Photovoltaic Pricing: The Role of Market Structure, Technology and Policy

Share

Click here to view PDF.

Installations of solar photovoltaic (PV) systems have expanded rapidly over the past decade. Along with this growth has been a substantial decline in PV system prices. Yet, there remains considerable heterogeneity in PV system pricing. For example, among residential and small commercial systems installed in the United States in 2013, roughly 20% were sold for less than $3.90/W, while a similar percentage were priced above $5.60/W.    

In the report, a team of researchers from Yale University, University of Wisconsin-Madison, University of Texas-Austin, and Lawrence Berkeley National Laboratory empirically examined heterogeneity in PV prices in the United States. The research explored different plausible sources of price variation, including characteristics of PV systems and household demographics, as well as measures of installer competition, installer experience, demand for PV, and public policy. A rich dataset of nearly 100,000 PV systems over the 2010-2012 timeframe was analyzed, focusing on systems under 10 kW and excluding many third-party owned systems.

The study focuses on systems ranging in size from 1 to 10 kilowatts (kW). Even within this narrow range, differences in system size were the single largest source of price variability, leading to a $1.50/W price differential between the smallest and largest systems. Other differences in system characteristics, such as tracking equipment or batteries, and installations in residential new construction, also had substantial price impacts.
 
A wide variety of other explanatory factors for pricing variability were tested and in many cases found to have sizable impacts. The report notes, however, that even after accounting for these many underlying influences, a great deal of pricing variability remained unexplained—suggesting the potential importance of other unobserved contributors and the opportunity for further inquiry.

 

Resource Type

Browse Resources by Related Topics:

Related Resources

Tuesday, Nov 29, 2022

Solar Means Business 2022 Dataset

SEIA's Solar Means Business Report tracks solar adoption from America's corporations and businesses. SEIA members at the Watt level and above have access to the full dataset behind this report, containing project level data for more than 48,000 individual commercial solar systems.

Read More
Thursday, Sep 08, 2022

Solar Market Insight Report 2022 Q3

The quarterly SEIA/Wood Mackenzie Power & Renewables U.S. Solar Market Insight report shows the major trends in the U.S. solar industry. Learn more about the U.S. Solar Market Insight Report. Released September 8, 2022.

Read More
Monday, Jul 11, 2022

Industry Sign-on Letter Supporting a Strong Clean Energy Reconciliation Package

On July 12, 2022, hundreds of companies across the clean energy industry in the U.S. sent a clear message to lawmakers: pass a reconciliation bill without delay that invests in America's clean energy future. 

Read More